Risk to Financial Performance from International Developments, Emerging-Market Economies and Foreign Exchange Fluctuations

「During the interim consolidated accounting period, the domestic economy remained uncertain, despite real wages showing an improving trend due to improvements in employment and income conditions, owing to factors including higher resource prices associated with the increasing instability in the situation in the Middle East, the continued upward trend in interest rates and the effects of natural disasters.」

「The economic outlook is expected to remain uncertain, due to continued soaring raw material prices and higher labor costs, the impact of higher interest rates resulting from rate hikes by the Bank of Japan, the continued weakness of the yen, and uncertainty surrounding U.S. trade policy and conditions in the Middle East.」

「Concerns about the economic outlook are expected to continue, including soaring raw material prices and higher labor costs, as well as the impact of rising interest rates and U.S. trade policy.」

「Meanwhile, continued price increases for food and household-related products, against a backdrop of higher raw material procurement costs resulting from soaring energy prices and the weaker yen, as well as higher labor costs due to the persistently high job-offers-to-applicants ratio, made consumers’ preference for thrift more pronounced.」

「Meanwhile, price increases for food and household-related products continued against a backdrop of soaring energy prices and the weaker yen, making conditions increasingly difficult for households.」

「During the period, imported resources and raw materials soared in price due to global supply chain disruptions and foreign exchange fluctuations. This rapidly developed into inflation that pushed up energy costs, including electricity charges, and the prices of many necessities, including food, resulting in a significant cooling of consumer sentiment.」

「During the first 3 quarters of the consolidated fiscal year, the Japanese economy showed signs of recovery in some areas of personal consumption, such as travel and dining out. However, higher raw material and other prices resulting from the prolonged situation in Ukraine and the weaker yen, as well as surging energy costs including electricity and gasoline prices, directly affected household finances and impacted overall consumer sentiment. As in the second quarter of the consolidated fiscal year, the environment surrounding the retail industry remained difficult.」

「Meanwhile, soaring prices for imported raw materials resulting from the prolonged situation in Ukraine and the weaker yen, along with rising energy costs, directly affected household finances. This widened disparities and heightened consumers’ already cautious spending attitudes, beginning to weigh on consumer sentiment, while the environment surrounding the retail industry remained difficult.」

「The impact of factors including China’s zero-COVID policy and the prolonged situation in Ukraine has driven up the cost of imported raw materials. In addition, the yen’s depreciation has intensified upward pressure on product procurement prices and energy costs,」

「As changes in international affairs and exchange rates are also expected to have an impact going forward, significant changes in household spending are expected,」

「During the current consolidated fiscal year, Japan’s economy was significantly restricted by the global spread of COVID-19. The real GDP for 2020 declined 4.8% from the previous year, marking negative growth for the first time in 11 years, as economic deterioration became pronounced due to factors including worsening employment conditions and sluggish personal consumption caused by declining income.」

「During the cumulative first quarter of the current consolidated fiscal period, Japan’s economy faced a situation in which its outlook could not be taken for granted, as the global spread of COVID-19 significantly restricted corporate and economic activity, further heightening concerns about an economic slowdown through deteriorating employment conditions and weaker personal consumption.」

「During the cumulative second quarter of the current consolidated fiscal period, Japan’s economy slowed, although personal consumption remained firm against the backdrop of favorable employment conditions, partly due to the impact of trade policies in various countries.」

「However, the trade policies of various countries and the slowdown in overseas economies are beginning to affect the domestic economy, increasing uncertainty about the outlook.」

「However, instability in international affairs surrounding trade balances and other issues remains unresolved, and concerns about the impact on the domestic economy continue.」

「However, international affairs surrounding trade balances and other issues have become increasingly unstable, raising concerns about the impact on the domestic economy.」

「During the cumulative first quarter of the current consolidated fiscal period, Japan’s economy continued on a moderate recovery trajectory overall, despite growing uncertainty in the global situation and concerns about the outlook for business confidence.」

「During the cumulative third quarter of the current consolidated fiscal period, Japan’s economy continued on a moderate growth trajectory despite the impact of exchange-rate fluctuations.」

「During the cumulative second quarter of the current consolidated fiscal period, Japan’s economy continued on a moderate growth trajectory, although economic activity was negatively affected by factors including weak corporate performance against the backdrop of a stronger yen and frequent natural disasters caused by typhoons and heavy rain.」

「There are concerns about risks to corporate performance, particularly among exporters, due to heightened uncertainty in international affairs, downturns in some emerging economies and further volatility in foreign exchange markets.」